State will go with off-the-shelf health insurance site

Monday

May 5, 2014 at 5:32 PMMay 5, 2014 at 5:35 PM

By Matt MurphyState House News Service

BOSTON -- Massachusetts has scrapped its hopes for a totally customized state-based health exchange under the Affordable Care Act, and will instead purchase an “off-the-shelf” solution that can be installed by the fall with the possibility of joining the federal exchange if all else fails.

The state announced Monday that it would contract with Virginia-based hCentive for health insurance exchange software that has been used to power online marketplaces Kentucky, Colorado, New York and other states.

Health and IT officials will simultaneously work to ready the state and its insurers to join the federal health exchange in case the hCentive software solution cannot be implemented in time for the next insurance open enrollment period that begins in November.

The state’s new website is expected to look and function much like Colorado’s connectforhealthco.com. The Patrick administration did not provide the cost of the new software.

“I’ve said all along that no option on the table would be perfect, and the dual track certainly has its benefits and its challenges,” Sarah Iselin, the special assistant appointed by Gov. Deval Patrick to oversee the state’s health exchange web fix, said in a statement.

She continued, “It does, however, solve for two realities: we need a reliable website to help people during the next open enrollment period, and we need to be in a position to achieve a fully integrated system in 2015.”

Iselin, who took a leave of absence from Blue Cross Blue Shield to head up the project for the governor, plans to return to her job in early June. Patrick’s deputy chief of staff Maydad Cohen has been appointed as Iselin’s successor to oversee the implementation of the new online insurance marketplace.

Iselin and Optum Chief Information Officer John Santelli intend to present the final plan to the Health Connector Authority board on Thursday morning. Optum, who assisted the Obama administration with fixing healthcare.gov, was brought in by the state in February as an IT consultant.

The failed rollout of the state-based health exchange last fall complicated the enrollment process for hundreds of thousands of Bay State residents, forcing Connector staff to implement time-consuming, manual workarounds to process applications. Nearly 160,000 residents have been placed in temporary Medicaid plans while the exchange is being fixed, and another 101,000 subsidized Commonwealth Care members had their plans extended.

Since the botched rollout of online market in October, the state has severed ties with contractor CGI and explored a variety of options to fix the almost non-functioning website, including hiring a new firm to rebuild the existing site.

According to a Patrick administration official, Optum concluded that rebuilding the CGI components “is too costly and too risky from a timeline perspective.”

Iselin, Administration and Finance Secretary Glen Shor and other state officials met with the Centers for Medicare and Medicaid Service last week in Washington, D.C. to discuss their latest thinking.

Officials said through the hCentive solution consumers would be able to go online, apply for subsidized and unsubsidized insurance, learn their eligibility for different levels of subsidy, and select a plan. The state is hoping to customize the packaged software to accommodate for some state-specific billing and premium support programs, which might not be possible if Massachusetts is forced to join the federal exchange.

If the hCentive solution is not ready for the fall, Massachusetts could connect to the federal marketplace – healthcare.gov – for one year, officials said.

Joshua Archambault, director of health care policy at the Pioneer Institute, said the state at this point should focus on turning its exchange operations over to the federal government, and determining the “bare minimum” unique characteristic to the state that must be retained in the enrollment process.

“Hiring a new contractor is a complete waste of taxpayer money,” Archambault said. “It doesn’t look like a recipe for success to me.”

Massachusetts has already received $174 million from the federal government for its exchange project, expending $57 million so far, including $17.3 million for CGI. The state is still negotiating a settlement with CGI for the remaining $69 million on the company’s contract.

“The state has been planning the transition to a new ACA website since they received the first planning grant in 2010. They have spent or obligated almost $180 million, and yet think it is a wise decision in just over 5 months to try again on the taxpayers’ dime. If this was the private sector, we would call this moral hazard,” Archambault said.

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